Where Will the World Buy Gas From After Russia?

Russia’s war of aggression against Ukraine has caused massive energy instability across Europe.

It’s led to long-lasting disruptions in the supply of gas, which much of the world still relies upon for heating and electricity.

Many countries have had to have difficult conversations about where they can get gas from, now that doing business with Russia is seen as helping fund an illegal war.

We’ve investigated which countries are still buying gas from Russia, and profiled the countries that’ll become major gas exporters in the wake of Europe weaning itself off of Russian gas.

Are any countries still buying Russian gas?

Yes, there are still countries buying Russian gas, such is the reliance of the world on Russia’s gas exports, which are still the second-largest globally.

It’s become a problem, particularly for European countries, as some of the largest economies on the continent are still importing billions of cubic metres’ worth of gas from Russia.

This includes Germany, Italy, and the Netherlands, which have imported 56.2, 29.2, and 13.2 billion cubic metres of natural gas from Russia in 2022, respectively. That’s 58% of Germany’s gas imports, 40% for Italy, and 12.5% for the Netherlands.

In total, NATO nations spent more than $25.2 billion (£22 billion) on Russian gas in the first 100 days of the war.

The UK has completely stopped all Russian gas imports on the other hand, going from importing 4% of its gas from Russia in 2021, to nothing as of July 2022.

Is there a plan to stop gas imports from Russia?

Stopping or limiting the amount of gas Europe imports from Russia has been at the top of the European Union (EU)’s priorities, as Russia uses the profits to fuel its war of aggression against Ukraine.

The EU sends Russia roughly €400 billion (£348 billion) each year, which pays for 40% of all gas imported by the bloc, and roughly 27% of its oil imports.

In light of the conflict, the EU announced in May 2022 that it plans to speed up its shift towards green energy, while also looking to invest in new gas pipelines in other countries.

Called the REPowerEU, this plan states the EU will reduce gas imports from Russia by two-thirds in 2022. That’d be a reduction in yearly spending on gas from €43.8 billion (£38.3 billion) to €14.6 billion (£12.7 billion).

The initiative also proposes that all fossil fuel imports from Russia end by 2030 at the latest, but the focus is solely on gas for now. Even so, it’s going to be difficult, with EU Commission vice president Frans Timmermans saying “it’s hard, bloody hard”, before adding that “it’s possible if we’re willing to go further and faster than we’ve done before.”

The energy situation will be painful in the short term while the shift to more renewable energy takes place. Gas prices have already risen by 210% over the past year, and key pipelines from Russia to Europe have been severely restricted.

170 million cubic metres of gas flowed through Nord Stream 1 every day in 2021, a figure which fell to just 20 million cubic metres by the middle of 2022.

Which countries will become the new major gas exporters?

Qatar, the US, Algeria, Norway, Denmark, and Azerbaijan are the main contenders to replace Russian gas hegemony.

Moving away from Russian gas will still be a challenge, even if other gas-rich countries step in to fill the void.

The main problems are logistics, infrastructure, political differences, and the natural increase in the cost of gas as demand goes up.

Here’s a breakdown of the major gas exporting countries.

Algeria

Algeria sits on 4.5 trillion cubic metres of proven gas reserves, and has been supplying fuel to Europe for decades.

It’s currently the third-largest exporter to the continent, sitting behind Norway and Russia in first and second respectively.

The country supplies much of Spain and Italy’s gas via pipelines, as well as LNG (liquefied natural gas) via tanker and truck to other European nations.

Algeria was earmarked as a potential solution to weaning Europe off of Russian gas, but the country’s authoritarian government and its continued friendship with Russia make this controversial.

The worry is that Algeria, like Russia, could use its gas as a political weapon — which means it might not be the stable source of gas the world needs right now.

Qatar

Proven gas reserves of 24.7 trillion cubic metres place Qatar in the top three exporters worldwide, which has caused a lot of countries who currently rely on Russian gas to turn to the desert nation.

Qatar has so much gas, that if it were to use it solely for its own purposes, it would take 609 years to burn through it all.

You’d think that’d be more than enough to solve the world’s gas problem, but Qatar has made it clear it already has commitments to nations like China, South Korea, and Japan, and isn’t sure it can meet the increased demand.

The deputy prime minister of Qatar did meet companies in Germany to discuss new supplies of LNG, though it was made clear this was not a solution for Europe’s short-term needs.

Qatar also reportedly wanted to secure a long-term, high-price LNG contract with Germany, possibly for as long as 20 years. This would fly in the face of the EU’s plan to transition to more renewable energy sources.

Norway

Prior to Russia’s invasion of Ukraine, Norway was already a huge exporter of gas to Europe, supplying 20% of the EU’s gas needs.

The UK is a huge buyer of Norwegian gas too, with the Scandinavian country providing more than one-third of all the gas the UK imports.

Norway is well placed to fill the Russian void then, especially considering the country has 1.8 trillion cubic metres of proven gas reserves — roughly 2% of all the gas in the world.

95% of the gas Norway exports goes via a series of pipelines to the continent.

US

In the wake of Russia’s invasion of Ukraine, the US has positioned itself to supply Europe with vast quantities of LNG.

Just one year ago, it was exporting 20% of all its LNG exports to Europe. That figure has rocketed to 60%, and the US is making a lot of money as a result.

Industry experts say the US is raking in around $200 million (£177 million) per shipment of LNG, and some say the figure could be as high as $275 million (£244 million).

Companies within Europe that bought LNG from the US before the big price hike are making big profits as well.

Experts at Vortexa, an energy cargo tracking website, believe some companies are making profits in excess of $150 million (£133 million) on shipments.

Unlike gas from Russia, the money is flowing, and the reality is Europe has little choice but to pay the inflated prices.

Azerbaijan

Azerbaijan, like Algeria, is a gas-rich nation ruled by an authoritarian government, which makes sourcing gas from the country a controversial move for Europe.

That hasn’t stopped European Commission President Ursula von der Leyen and Azerbaijan’s President Ilham Aliyev signing an agreement to double gas exports to the EU.

The agreement means Azerbaijan will supply Europe with around 20 billion cubic metres of gas every year via the Southern Gas Corridor, a 3,000 kilometre network of gas pipelines.

A hurdle in this agreement is the fact that Lukoil, a Russian gas and oil giant with close ties to Putin, co-owns critical infrastructure needed to extract and transport the gas. It’s difficult to predict how the company would act if Putin pressured them to restrict exports.

Summary

Europe knows that securing enough gas before the winter is imperative, but what’s not being spoken about enough is the need to transition to green energy more quickly.

Even with other countries stepping in to fill the gas void left by Russia, it’s clear that countries must improve their green energy infrastructure.

It’s time for politicians to stop promising and actually start doing, because one day the gas will be gone for good.